Thursday, June 25, 2009

Rupee steady at 48.57 a dollar in early trade

The Indian rupee on Thursday remained steady at 48.57/58 against the US currency in early trade on weakening of dollar in the overseas

At the Interbank Foreign Exchange
(forex) market, the domestic currency resumed at 48.57/58 a dollar against its previous close of 48.55/56.

Forex dealers said the Indian benchmark Sensex is expected to open in a strong note in tandem with other Asian markets, which are higher by up to 2% in the morning trade, influencing rupee sentiment.

The Indian benchmark Sensex on Wednesday ended up 99 points or 0.69% on late buying support.

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Thursday, June 18, 2009

US banks pay back bail-out cash

US banks have started to pay back money borrowed through the government's Troubled Asset Relief Program (Tarp). Ten banks have collectively repaid $68bn(£41.5bn) out of the $700bn provided through taxpayer money.

Of these, JP Morgan repaid $25bn, Goldman Sachs and Morgan Stanley each paid $10bn, US Bancorp paid $6.6bn and American Express returned $3.4bn. Before being allowed to pay back money, the banks had to be able to show that they were able to raise cash privately.

Other banks to repay funds on Wednesday included Capital One Financial, which paid $3.6bn, BB&T Corp paid $3.1bn, Bank of Mellon New York paid back $3bn, State Street returned $2bn while Northern Trust returned $1.57bn. The 10 banks were given the permission last week to return the funds after undergoing government financial stress tests but Wednesday was the first day they could return the money.

"Real stability can return return only if our industry accepts that certain practices were unhealthy and not in the long-term interests of individual institutions and the financial system, as a whole," said Lloyd Blankfein, Goldman's chief executive, in a letter given to congressmen and senators. By repaying the funds, the banks will no longer have to pay dividends to the government or limit pay and bonuses.

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Wednesday, June 10, 2009

Sidelined cash is huge, but is it antsy to go somewhere?

Besides the apparently moderating recession, what gets Wall Street bulls excited these days is talking about the mountain of cash sitting on the sidelines -- particularly in money market mutual funds.

Money fund assets have risen dramatically in the last three years, to the current $3.7 trillion from $2 trillion in mid-2006.

Sooner or later, bulls surmise, investors will grow weary of tiny yields on money funds -- now averaging a record low 0.15% on taxable funds -- and will funnel a chunk of that cash into the stock market, providing more fuel for an extended bull run.

In a research report on Monday, Jack Ablin, chief investment officer at Harris Private Bank in Chicago, said that whenever money market assets have exceeded 25% of the capitalization of the Standard & Poor’s 500 index, stocks have rallied over the following two years. That number currently is 43% after having peaked at 58% in mid-December.

There’s no doubt that some fickle money-fund cash will flow into stocks; indeed, after peaking in early January, money fund assets have edged lower as the stock market has surged.

But money funds might not provide as much juice as the bulls expect.

For one thing, much of the cash flow into money funds over the past two years had little to do with the collapsing stock market, said Peter Crane, chief executive of research firm Crane Data.

Corporations, which account for two-thirds of money-fund assets, have built up funds for purposes ranging from emergency reserves to bankrolling mergers, and are unlikely to put that cash into stocks, Crane said.

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